Oct. 9 (Bloomberg) -- Israeli Prime Minister Benjamin
Netanyahu called for early national elections amid a coalition
impasse over next year’s budget as polls showed him as the
leading candidate to form a new government.

“I have decided that the best interests of Israel obligate
us to go to elections now and as quickly as possible,”
Netanyahu said today in a televised address. “The people of
Israel prefer a short election campaign of three months instead
of a long campaign period of a whole year.”

Netanyahu has been meeting this week with members of his
coalition in an effort to reach an agreement on the 2013 budget.
He has been calling for deep cuts to stay within the targeted
deficit and was facing opposition from coalition members who are
reluctant to reduce spending. A vote must be held no later than
a year from now.

“Netanyahu sees that the polls are in his favor right now,
and if he’s having trouble with the budget this would be the
best time for elections rather than waiting another year,” said
Mark Heller, senior research fellow at Tel Aviv University’s
Institute for National Security Studies.

According to a poll published by the Haaretz daily on Sept.
28, Netanyahu’s Likud party would win 28 seats in the 120-seat
Knesset, one more than it currently holds, making it the largest
faction in parliament. The survey also showed 35 percent of
Israelis see him as “most suited” to lead, almost double the
16 percent of his nearest contender for the premiership, Shelly
Yacimovich of the opposition Labor party.

Budget Cuts

Israel must cut next year’s budget by about 17 billion
shekels ($4.4 billion) to stay within fiscal limits as it faces
a possible deepening of the European financial crisis, Bank of
Israel Governor Stanley Fischer said in August. The government
deficit was 4.1 percent of gross domestic product in the months
through August, more than double the original target for 2012,
the Finance Ministry said on Sept. 4.

The government already has approved higher taxes beginning
in 2013 to help meet next year’s revised deficit target of 3
percent of GDP.

Early elections would come amid rising tension between
Israel and Iran over the Islamic Republic’s nuclear program.
Netanyahu said at the United Nations on Sept. 27 that “by next
spring, at most next summer,” Iran will be in the final stage
of having enough enriched uranium to make a nuclear weapon.
Israeli leaders have said that “all options are on the table”
to prevent that from happening, including a military strike.

“I wouldn’t link Netanyahu calling early elections to any
decision on Iran,” Heller said. “I don’t think he’s looking at
the military option right now. If he was then holding elections
also wouldn’t prevent that.”